I imagine that this will affect determination as to whether this is a good deal or not. 

Young guys willing to make the sacrifice to house-hack, but are having a hard time getting the GF on board because that beat up duplex in a C class neighborhood is not what she had in mind when she imagined her first house lol. 

., @Michael Ealy, @Preston Quinn, to illustrate my point imagine two potential investments: Both will rent for $1500/month. #1 is bought at FMV for $150k (hitting the 1% rule),#2 is BRRRRed for an ARV of $200k, refi is for $150k (meeting your 1% rule)Expenses are the same:$150: Management (10%)$120: Vacancy (8%)$112: Repairs (7.5%)$112: CapEx (7.5%)$150: Property Taxes$75: InsuranceAssume utilities are billed to tenants=$719 Total ExpensesCashflow for #1: $177/month$1500 GSR - $719 Expenses - $604 Debt Service (5%, 30-yr, 25% down)Cashflow for #2: ($24)/month, that's negative$1500 GSR-$719 Expenses-$805 Debt Service (5%, 30-yr, 25% equity left in deal)Of course, you have $50k of equity in #2, which is awesome, but the 1% rule is used to determine if a property will likely cash flow as a buy-and-hold rental.

I imagine you trade the (relative) ease of the process for a smaller cash flow correct?

As a landlord, if you receive knowledge that there are additional occupants not listed in the lease agreement, your lease should state the consequences - typically increased rent and/or eviction due to breach of lease.I can imagine, especially in Los Angeles, where someone might think it's a good idea to state maximum occupancy as soon as possible, but I would be hesitant because, again, there is no fixed rule.

Back in the day when foreclosures were popping like corn, I was very successful but now I would imagine it would be harder because the lender can get full or close to full value for their asset.  

Whether that is actually true or not or just a misconception and lack of imagination on the companies side...who knows.

I would imagine most "wholesalers" are lured in by the idea of getting into real estate with 0 money, no credit, etc. 

Imagine how nice a complex becomes if many of the owners have moved and are dying to sell but cannot.

I’d imagine renting by the room adds more work for you.